Europe is investing billions in climate startups at early stages, but many fail at the Series B stage. New funds are emerging to fill this gap, among them Kembara Fund I from Mundi Ventures.
After raising €350 million from the European Investment Fund (EIF) under the European Tech Champions initiative in 2024, Mundi Ventures has just closed the first close at €750 million for Kembara – the fifth fund raised and the largest to date.
Spanish regulatory filing indicates that a deep-tech-focutilized fund could even push the final close to €1.25 billion. But, according to Kembara co-founder and general partner Jan de Vries, reaching €750 million in two years as the first fund in this space “was not straightforward”.
Kembara is led by a specialized Mundi Ventures team with offices in Madrid, London, Barcelona, and Paris. The founder of Mundi Ventures, Javier Santiso, also became co-founder and GP of the Kembara fund, and the fund has now disclosed the full roster of its senior partners.
Joining De Vries and Santiso on the team are climate venture investor Robert Trezona and deep-tech venture Pierre Festal as general partners, while former Atomico partner Siraj Halik – senior strategic advisor.
Their experience assisted attract institutional backers who woke up to the necessarys of European growth capital capable of turning numerous university spin-outs into large manufacturing and industrially synergistic companies. At the same time it gave them a closer view at the overall challenges facing European climate and deep-tech startups – especially Jan de Vries.
In my view, Lilium went bankrupt becautilize it failed to find the right growth capital, but that traumatic experience also had a bright side. I’ve seen so many amazing teams in Europe going through the same journey.
“Sweet spot” for Kembara are Series B and C rounds, with plans to sign initial investments of €15 million to €40 million in around 20 companies. But the fund size also enables follow-on rounds to support manufacturing scale-up and global market entest, with total investments potentially reaching €100 million per company.
This is larger than the full size of many European funds, though the market is modifying: Elaia and Lazard formed LEC (Lazard Elaia Capital), whose initial investment range will be from €20 million to €60 million per company, while the Plural fund is reportedly raising a new fund of up to €1 billion.
Despite the capital intensity of most climate and deep-tech companies, even large venture checks do not solve the entire problem. According to De Vries, the subconscious belief that “the market must shift forward on equity alone” does not assist – so Kembara has chosen a different financing approach.
“A few of us have lived through this, and now we want to deliver non-fund financing for these deep-tech founders to reduce the risks of future financing and optimize the capital structure with minimal dilution. We are bringing in limited partners who want not only to invest in the fund but also co-invest in the winners,” declared Jan de Vries.
For these LPs geopolitics also plays a role: support from European sovereign funds, governments, and corporations can assist European companies grow and secure their international supply and markets.
“Significant support is expected from Europe’s sovereign funds, from governments, from corporations – to build European champions in deep tech right in Europe.”
These geopolitical shades are also reflected in Kembara’s sector focus, which includes dual-utilize and defense technologies to “deffinish Europe’s sovereignty” per the press release. However, De Vries cautions that Kembara is not a substitute for the capital European deep-tech players could attract abroad.
“There are many valuable gems in Europe that go under the radar and could become global champions,” he summed up.
Additionally, there are Malaysian echoes in the team: Santiso was the former Europe CEO at Malaysia’s sovereign wealth fund Khazanah; in the second close global investors are planned to be attracted to ensure access to world markets and supply chains.
Strategy and future plans
Kembara plans to focus on deep technologies with potential for global scale, while also offering non-fund financing to reduce risks and minimize equity dilution. This should allow the portfolio to develop manufacturing and enter international markets more efficiently.
In the second close, the fund aims to attract global investors to ensure access to global markets and supply chains, supporting portfolio scaling and the formation of European champions in the deep-tech space.
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